NTCA Urges USF Contribution by Web Content Providers
Some small rural phone companies are asking if Google and other content providers should contribute to the Universal Service Fund. In filings and meetings this summer at the FCC, the National Telecommunications Cooperative Association has urged the FCC to open a rulemaking on the subject (CD Aug 31 p9). Content providers impose significant costs on companies’ networks, and charging them for USF would further the FCC’s broadband deployment goals, said NTCA Vice President Dan Mitchell in an interview. But a Google spokesman disputed the credibility of NTCA’s evidence. And some phone companies aren’t sure the proposal can be implemented.
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NTCA wants the FCC to seek comment on whether the agency has authority to require USF fees from content providers that use significant network resources, Mitchell said. Mitchell doesn’t envision every Web site paying into USF, he said. But a December 2008 paper by Precursor President Scott Cleland said Google drains service provider networks with YouTube video streams and search engine bots that take snapshots of the Internet every few seconds, he said. Consumers are currently subsidizing those companies’ activity at the expense of the network, he said.
“Google apparently received an implicit $6.9 billion subsidy from American consumers” in 2008, NTCA said in comments this June. Google consumed 16.5 percent of all U.S. consumer Internet traffic in 2008, but paid only 0.8 percent of all U.S. consumer bandwidth costs, the association said: “This apparent growing consumer cost burden may threaten the future affordability of retail broadband Internet access services and jeopardize the future deployment and subscription of broadband to all Americans.”
A Google spokesman said NTCA has cited a Cleland study that was “thoroughly discredited” by “numerous independent people,” including Gartner, Ars Technica and Information Week. Google Washington Counsel Richard Whitt bashed the paper and its author in December. Cleland “is paid by the phone and cable companies -- AT&T, Verizon, Time Warner, and others -- to be a full time Google critic,” Whitt wrote. Consumers who use Google, not Google itself, are consuming bandwidth. “To say that Google somehow ‘uses’ consumers’ home broadband connections shows a fundamental misunderstanding of how the Internet actually works.” And Google pays billions for bandwidth and server capacity to connect its data centers together, he said.
“The issue is worth FCC investigation, but it should not be higher priority than many of the more fundamental issues,” like what should USF support, said David Bergmann, telecom committee chairman for the National Association of State Utility Consumer Advocates. NASUCA hasn’t taken a position on whether content providers should pay into the fund, but the consumer advocates have called for requiring all broadband service providers to contribute, he said.
Assessing USF fees on content providers may not be “doable,” said John Rose, president of the Organization for the Promotion & Advancement of Small Telecommunications Companies. “I'm not sure what the legal basis would be to do that,” he said. And it probably will be tricky to decide which Web sites should be required to pay if not all, he said. Basing USF contribution on the amount of phone numbers a company owns would be “the best and quickest way to broaden the pool of contributors,” said a USTelecom spokesman.
The FCC might have jurisdiction over information service providers like Google under Title I of the Communications Act, Mitchell said. There may be disagreement, but the FCC should at least open the question for comment, he said. The Internet Tax Moratorium Act wouldn’t block the FCC from assessing USF fees to content providers, he said, because USF isn’t a federal tax under the U.S. Tax Code, but rather a cost-recovery mechanism.
Cleland’s “analysis is wrong on several levels, but the argument that Google uses other people’s pipes for free turns out to have some truth in it,” said Silicon Valley network architect Richard Bennett. When a consumer watches a YouTube video, 99 percent of the traffic is in one direction, so the consumer’s ISP “pays the largest share of the transit costs,” he said. “Google owns its own network, and participates in these exchanges like an ISP except that they send way more than they receive, hence they do consume more ISP bandwidth than they replace.”
Whether Google pays enough for the bandwidth it consumes is an issue separate from USF, Rose said. However, given the FCC’s focus on writing a broadband plan and the Obama administration’s views on net neutrality, it seems unlikely the commission would make that question a priority, he said.